Oil prices drop again amid increasing US stockpile
09 Mar 2015
Crude oil prices fell in Asia today on a stronger US dollar and ongoing concerns over swelling US inventories that are adding to a global supply glut.
According to Goldman Sachs, oil prices will reverse their recent gains as global crude inventories begin to increase again, with US crude likely to drop as far as $40 a barrel in the near term.
US benchmark West Texas Intermediate (WTI) dipped 20 cents to $49.41 a barrel, while Brent shed 39 cents to $59.34 in morning trade today.
WTI slipped $1.15 and Brent crude dropped 75 cents on Friday after a robust US jobs report sent the dollar soaring.
The US dollar bought 120.92 Japanese yen in Asian trade on Monday, up from 120.78 yen late Friday after the release of the February US jobs report. It stood at 120.14 yen on Thursday.
Despite bad winter weather, the world's largest economy added 295,000 jobs in February and the unemployment rate fell to 5.5 per cent, the lowest level since May 2008.
A stronger US currency makes dollar-priced oil more expensive for buyers using weaker currencies, denting demand and pushing prices lower.
The US Department of Energy last week said commercial crude inventories jumped 10.3 million barrels in the week up to 27 February, reaching new record for the fifth consecutive weak.
Crude prices lost about 60 per cent of their value to about $40 between June and late January owing to an oversupply in world markets, a weak global economy and a strong dollar.